purchase price of machine 150000.installation harges 50000,residual value 81920,useful life 4 yrs,the amount of depriciation under wdv method will be
a).40000 b).32000
c).25600 d).20480
1 Replies
Peter Sequeira
(*)
(81 Points)
Replied 20 February 2012
Step 1: Find rate of depn. using the following formula
R= (1 - n s/c ) x 100
Where R = Rate of Depreciation (in %),
n = Useful life of the asset (in years)
s = Scrap value at the end of useful life of the asset
c= Cost of the asset
N.B. i cant get a square root sign. the formula must read 'n' root of 's/c'
using the above formula. u'll get the rate of depn as 20%.
Step 2: Apply rate in question
Add installation chgs to the cost and calculate depn @ 20%. You'll get 40000 as depn for the year.
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